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Tax, Brexit, Politics.

Monthly Archives: November 2014

Today’s Smith Commission report duly contained the much foreshadowed devolution of income tax powers to Scotland. But what, in any likely world, will it mean in cash terms for Scotland?

Assume, as has been widely mooted, that the SNP carries through its intention to raise the top rate of income tax to 50%. And assume, also, that Labour remains out of power following the next General Election so that the rate of income tax in rUK remains 45%. And assume (as seems broadly reasonable) that Scotland’s share of the population of the UK (8.3%) is roughly equivalent to the share of UK income tax paid by Scottish residents.

Now, remember that HMRC calculated the yield for the UK from raising the top rate of income tax at £100m (a £3.5bn tax cut producing, after ‘behavioural effects’ a yield of some 3% of that sum). On that rough and ready calculation, we might expect Scotland to yield ~£8.3m from raising the top rate to 50%.

But bear in mind that the behavioural effects modelled by HMRC included, in particular, those who emigrate. And bear in mind, also, that emigration has a particularly powerful effect because those who emigrate to avoid a 50% rate of tax take with them not just the additional 5% but the other 45% too.

And ask yourself this: is it easier to emigrate from Scotland to, say, England than from the UK to, say, Monaco? And further, what might be the consequences for the strength of that effect of Scottish wealth being clustered near the English border?

Even before you begin contemplate that which has left the tax community in stunned silence – how on earth could you put in place legislative machinery to enable two different rates of income tax within a single country? And before you contemplate, too, the enormous additional administrative costs attached to administering two separate income tax systems (additional costs which the Smith Commission report (see paragraph 79) makes clear would be borne by Scotland). Even before you face up to those challenges, you are staring a hugely negative yield square in the face.

Jolyon’s approach to what the profession would regard as aggressive tax avoidance has, I believe, moved the debate on quite significantly. There is still a considerable way to go, but the discussions on his blog on badging tax risk show that a consensus looks viable.

However, while there is considerable agreement on some of the aggressive schemes we might encounter, I am also concerned about the much greyer areas of tax advice that we, the tax profession, might find that the wider public take a very different view of.

In considering reliefs, Jolyon has written several times about pro-purposive use and anti-purposive use. One being an appropriate use of a relief, which Government intended, the opposite being tax avoidance as a minimum. However, there are other situations where a very attractive tax result might be achieved for a client in much simpler circumstances; situations which are not susceptible to the same analysis, and about which the public might take a different view.

An example

Let’s think about a sole trader with total profits for tax purposes of £40,000 and no other income. His total tax and national insurance contributions on that income this year will be £9,743, leaving him with net pay of £30,257. If we were to advise him to form a limited company, and from the same profits draw a salary of £7,956 (equal to the NIC entry point) and the balance of profits after corporation tax as a dividend, his tax bill (there is no NIC payable) will reduce to £6,409, and net pay increases by 11% to £33,591. I am not comparing these two situations with those of the “man on the Clapham Omnibus” who is salaried at £40,000 a year with a much lower take home pay, as our business man has uncertainty about his income, and other factors to take into account. However, whether he trades as a sole trader or a limited company, the profit outcome is likely to be broadly similar (subject to some administrative costs). Not only that, but our company director is in a far superior position regarding state pension, as he is credited with an earnings related element in addition to the basic state pension entitlement, despite having paid no NIC at all.

Bigger numbers – bigger difference

Why not scale this up? Another sole trader has profits of £100,000 a year. As a sole trader his current year tax and NIC liability would be £34,701, leaving net pay of £65,299. If he decides to trade through a limited company (which he might do for entirely non-tax reasons) and takes the same profit extraction route as described above, his overall tax liability falls to £29,177, a saving of £5,512. This overall saving at 8% is smaller in percentage terms than the example above. However, having taken advice he has given 50% of the shares to his wife, protected by the outcome in Jones v Garnett. The overall tax bill now falls further, to only £19,984, a total saving against a self employed position of £14,717, and an increase in overall net return of 22%.

I am not for one minute arguing that I believe that this is unacceptable behaviour – indeed I would probably be negligent for not suggesting it – but maybe some people think that it is. Is the mischief limited company status? I don’t think so, because if the director chose to take all of the profits by way of salary his tax bills would be significantly larger – indeed they would be higher by reason of employer’s NIC in addition to employee contributions.

So is the problem the method selected for extraction of profits? What if his needs are modest and the profits are almost all retained in the company, bearing tax of only 20%? If he retains, say £25,000 of profit in the company, his tax bill falls to £23,563 as a sole shareholder – a saving of £11,317 against his position as a sole trader, and to £18,409 as a joint shareholder, saving £16,292. Some will still argue that this is unacceptable, but the fact is that the valid choices made about how to structure a business and how the profits are extracted has a major impact on the tax charge.

Bad or not?

What does HMRC or Government think about these situations? They have been well known about since Jones v Garnett but after some initial suggestions to address that case we have heard nothing further. We now have the GAAR but given this sort of planning is well known about it looks like the GAAR is not in point. So it is all right then?

I do think this is an important area for this debate to consider. It would disturb the lay reader who might consider that professional tax advisers are at fault for suggesting it. And yet we are only doing what every other tax adviser would do – and should do if they are not to be held negligent. However at present HMRC has shown little or no to appetite to tackle this type of bread and butter planning.

What could or might be done? I promised Jolyon a blog about “how we got here” – meaning the way that we arrived at the current tax rules, but it proved difficult to establish an overall theme. What I did observe was that Governments of the last 50 years have had very differing agendas and the constantly moving tax rules to reflect those views. Taxing unearned income at a premium of 15% for some considerable time, as “bad” income. Taxing companies which distributed most of their profits at a greater rate for some time, and then in a complete volte face, imposing additional tax on company profits which were not distributed (many will remember close company apportionment calculations).

The first step would be to reach an agreement about whether we regard these wide variations in tax burden on essentially the same income as an acceptable outcome of choice, or an unfair advantage. Then we might think about what comes next.

For clarity of debate, I offer the below. It can be read together with my earlier posts today on the GAAR Penalties Regime which are here and here.

The GAAR catches transactions in (7). It doesn’t catch people transacting in (4), (5), (6) or (8).

Without a GAAR specific penalties regime, the GAAR does not always create an effective disincentive to transacting in (7). People can transact and take a punt on escaping a GAAR counteraction. For many there will be but modest downside to a counteraction – some hassle and professional fees but with a huge potential tax gain. The same is even more true for those transacting in (6).

With a GAAR specific penalties regime, no one will transact in (7). People will absolutely be put off transacting in (6). I think these are ‘pro’s. The potential ‘con’ is whether people would be put off transacting in (5). I think not because I think (6) creates ample clear water between (5) and (7).

1. There is, of course, already a tax-geared penalty regime which applies to the GAAR, namely, that in Schedule 24 of the Finance Act 2007 for under-declared liabilities to tax. However, the trigger for that regime is the existence of a degree of culpability on the part of the taxpayer for that under-declaration. There will, of course, be instances where the fact that the taxpayer’s return (showing, say, tax of 20) culpably fails to include a tax saving (of, say, 80) arising in consequence of abusive behaviour that is later counteracted by the operation of the GAAR. However, the circumstances where the taxpayer will be culpable for not showing the right tax (100) on his return may be limited given that (a) he will have been advised that the behaviour generates a tax saving (of 80) and is not abusive and (b) there is some scope for policy decisions by HMRC to affect whether the GAAR is in fact operated.

2. Where the GAAR operates it restores the taxpayer to the position he would have been in had he not engaged in the abusive tax conduct (in the example above, his tax liability is restored to 100). However, professional fees, any economic costs, and the remote possibility of Finance Act 2007 penalties aside, the effect of the GAAR will simply be to restore him to the position he would have been in had he not engaged in the abusive behaviour at all.

3. Discouraging abusive behaviour, therefore, requires that it carry a risk over and above the taxpayer being restored to the status quo ante (i.e. a tax liability of 100). The answer is a special penalties regime. An appropriately drawn regime will encourage taxpayers to interrogate their advisers as to whether there is a risk that proposed planning will be abusive. It will also encourage advisers to be more cautious about suggesting abusive planning. I am aware of no reason of principle why one should not discourage abusive planning through the use of penalties.

Policy Choices

4. A penalties regime will also likely have what one might describe as a modest penumbral effect. In other words, it will not merely discourage practices caught by the GAAR but it will discourage practices that might be caught. And the higher the penalty, the stronger the discouragement.

5. Whilst this is bound to have short term positive fiscal impacts, it must also be recognised that the penumbral effect could act as a discouragement to taxpayers to engage in acceptable or pro-purposive tax planning. (I assume this to be an undesirable consequence although others might disagree).

6. One might reasonably assess the penumbral effect to be modest given that the GAAR is tightly drawn. Moreover, one can certainly modulate the extent of the penumbral effect through the rate at which one sets the penalty. The other mechanism that one might adopt is arrangements whereby one mitigates the penalty according to whether the taxpayer had good reason to consider the arrangements not to be abusive. A similar mechanism has been adopted to mitigate, for example, the effects of Follower Notices.

7. Addressing these points in turn, I consider the GAAR (importantly, as presently drawn) to be tightly focused. An experienced adviser approaching the question ‘Is this planning abusive?’ with an appropriately open mind is, I consider, likely to be able to reach a reasonably accurate assessment of the answer. Putting the matter another way, I consider the quality of the GAAR in its present form is likely to have as its consequence that the introduction of penalties is likely to have a limited, and in some measure desirable, penumbral effect.

8. Where there is a penumbral effect, that effect will be strongest on arrangements which are abusive but are nevertheless not caught by the GAAR. As others have observed, the GAAR operates only when arrangements are (putting the matter somewhat crudely) clearly abusive. This is the consequence of a policy call having been taken by Parliament about where to strike the balance between maximising legal certainty and maximising the reach of the GAAR, a policy call articulated in the language used in, for example, section 207(2) Finance Act 2013. The penumbral effect will be strong where the arrangements are (again crudely) probably abusive but there is nevertheless some doubt about whether they are. This particular penumbral effect may be regarded as desirable.

9. As to the size of the penalty, plainly it must be tax-geared i.e. a function of the amount of tax the abusive practice purports to ‘save’ (80 in the example). Plainly also it must appropriately risk the abusive behaviour. Different people will reasonably arrive at differing assessments of what the right level of risk is. My personal view is that 100% is not unreasonable and it also has a symbolic attractiveness. The effect will be that the taxpayer with an initial liability of 100 who engages in abusive behaviour reducing his tax bill to 20 will, when counteracted and penalised, face a final liability of 180.

9. As to mitigation, there will always be cases where an application of a tax geared penalty will lead to genuine injustice. One will also want to encourage taxpayers engaging in behaviour that might be abusive to tell HMRC. And one will wish to incentivise taxpayers to come clean if they have engaged in abusive behaviour.

10. However, the scope of mitigation should be narrowly drawn.

11. I consider a discount of 50% should be given where the taxpayer discloses on his tax return that he has engaged in conduct that may be considered abusive (so the disclosing abusive taxpayer’s liability is 140).

12. I consider a discount of 25% should be given where the taxpayer who does not initially disclose later discloses (160). This discount is not high. However, it must be smaller than that for the person who discloses on his tax return otherwise one fails to incentivise the taxpayer not to make an initial disclosure – and to wait and see whether HMRC refers his transactions to the GAAR Panel.

13. As to injustice, one must recognise (a) that in certain circumstances the taxpayer may quite reasonably rely on his adviser (b) there are powerful commercial incentives for advisers to give over-optimistic advice about tax risk (professional fees are often a function of whether a taxpayer enters into arrangements rather than whether he seeks advice on them). One has regard to these competing considerations, it seems to me, by mitigating for injustice only where the taxpayer can demonstrate that he took a genuine interest, appropriate to the tax saving, in whether the arrangements in question were or were not abusive. Although this may be a matter of detail which is downstream of these brief thoughts, one may wish to stipulate particular factors that a tax tribunal will accept as demonstrating the presence of a genuine interest including whether the taxpayer took advice from a specialist unconnected to the promoter of the arrangements.

Postscript: I’d suggest readers might have a look at this Schematic which sums up what the GAAR does – and how a GAAR specific penalties regime might affect its operation.

In his speech yesterday at the University of London Ed Miliband promised a further crack-down on tax avoidance. Overnight the detail emerged on Ed Balls’ blog:

We have supported the introduction of a General Anti-Abuse Rule (GAAR). Those who set up abusive schemes should run the risk of being caught by such a rule.

But it is currently a GAAR without teeth. Those who are caught have to repay the tax they tried to avoid, but they do not face a penalty. There is still no disincentive to try and game the system. That is why Labour will bring in a tough penalty regime for the GAAR, with fines of up to 100 per cent of the value of the tax which was avoided. For the first time this will provide a tough and genuine deterrent to those who try to abuse the system and avoid paying their fair share of tax.

Way back in the year 2000 Accountancy Age, perspicaciously described the Hardman Lecture as an “agenda setting” annual event in the tax calendar. In my speech on Tuesday night at the ICAEW I observed as follows:

I’ve been calling for many months in this blog for the Labour Party to raise its game on tax. This is a real sign that they’re starting to form into workable, concrete and effective policy what might otherwise be mere rhetoric.

1. Introduction

The recent debate on tax in the UK has strayed into the murky area of questioning the relevance of morality. Chair of the Public Accounts Committee Margaret Hodge has stated that exploiting the complexity of tax law to reduce tax liability is “morally reprehensible”. David Cameron meanwhile recently voiced the opinion that there is a “moral duty” to cut taxes in order to allow people to spend more money on their families. What has perhaps been overlooked in relation to these assertions is that philosophers and jurisprudes for centuries have struggled to understand not only what influence morality has on the law, but also what influence it ought to have. As such, it appears unlikely that there will be a speedy resolution to the debate about tax law and morality.

Leaving aside the issue of what part morality ought to play vis-à-vis reducing tax bills; it is interesting to note that in certain circumstances there is no rigid figure as to the tax which must be collected by HMRC. Taxpayers may find their tax bills to be less than that which is strictly owed under the law, without resorting to the use of ‘gimmicks’ or abuse of reliefs. Accordingly, the tax which is raised from taxpayers is relative in the sense that it may legitimately be less than the amount Parliament has stipulated and this generally arises in two instances: first, where the law is fuzzy and second, where the law cannot practically be applied. The thesis of this post is that this relativeness is likely to play a more substantial role in the collection of tax than morality.

2. Theory of relativeness

To explain this relativeness, it is worth recalling that HMRC’s primary duty is to collect and manage taxes and credits (Commissioners for Revenue and Customs Act 2005, s. 5). Within this duty, however, there is a wide managerial discretion:

“In the exercise of these functions the board have a wide managerial discretion as to the best means of obtaining for the national exchequer from the taxes committed to their charge, the highest net return that is practicable having regard to the staff available to them and the cost of collection” (R v IRC, ex parte National Federation of Self-Employed and Small Businesses [1982] AC 617 (HL), at p. 637 (Lord Diplock))

This discretion however is limited to an extent:

“It does not justify construing the power so widely as to enable the commissioners to concede… an allowance which Parliament could have granted but did not grant” (R v HMRC, ex parte Wilkinson [2005] UKHL 30, para. 21 (Lord Hoffmann))

Taken to its logical conclusion, so long as the Revenue does not contradict the intention of Parliament, this discretion permits the use of cost-benefit analysis:

“In particular the [R]evenue is entitled to apply a cost-benefit analysis to its duty of management and in particular, against the return thereby likely to be foregone, to weigh the costs which it would be likely to save as a result of a concession which cuts away an area of complexity or likely dispute” (R (Davies and another) v Revenue and Customs Comrs; R (Gaines-Cooper) v Same [2011] UKSC 47, para 26 (Lord Wilson))

As a result of this discretion and legitimated use of cost-benefit analysis, HMRC is entitled to collect less tax than might be strictly due under the law. Thus, in the case of complex or fuzzy law where it is unclear as to the true amount of tax which is due, HMRC are empowered to arrive at a working interpretation which objectively satisfies the will of Parliament and in their opinion would raise the greatest amount of money in relation to that tax, over the course of all taxpayers. This same principle applies where the law itself is clear but would be impractical or unworkable in a certain set of circumstances. Where this arises, the Courts have found time and time again that it is proper for HMRC to forego the full collection of tax, so long as it is done with a view to raising the greatest amount of money for the exchequer overall. By focusing on morality in the tax system then, we ignore the other factors that in practice have a greater impact on how HMRC collect tax and how much tax they collect.

3. Application of relativeness

As this discretion is contained within the fundamental duty of HMRC, it pervades much of what they do. Three instances of the corresponding relative nature of tax appear especially pertinent to the differentiation between tax collection in practice and the normative collection of tax. The amount raised from settlements need not be the true figure which is prescribed as due under the law. Likewise, the decision to take or not take test cases rests solely with HMRC. This decision pivots on analysis of the benefit and likelihood of success rather than the desire to clarify law where it is unclear. HMRC may similarly spread their resources for the everyday collection of tax in a manner which would not collect all that is strictly payable. In each of these cases, what ought to happen is at conflict with what actually happens.

A) Settlements

One of the most controversial elements of tax collection in recent years has been the negotiation of settlements with large businesses. Sir Andrew Park, former High Court Judge and perhaps the most widely respected Tax Silk of his day, was commissioned to investigate HMRC’s conduct in relation to large settlements. Ultimately, the report concluded that the 5 settlements examined were ‘reasonable’ in terms of fair value for the Exchequer and public interest. As to the parameters of ‘reasonableness’, the report further provided as follows:

“[Reasonableness] included considering whether the settlement was as good as or better than the outcome that might be expected from litigation, considering the risks, uncertainties, costs and timescale of litigation” (Park Report, p. 5)

These cases concerned a complex smorgasbord of issues and must be held against the backdrop of resource constraints. It is for this reason that the question of reasonableness was resolved, not on the basis of what is due under the law, but on the basis of what might be gained from litigation. This is strictly what the exercise of managerial discretion requires (although the revised ‘Litigation and Settlement Strategy’ somewhat circumscribes HMRC’s power).

More generally, this report provides an insight as to the way HMRC may go about settling cases and litigation. Where the law is unclear and the litigation of the case would not be cost-beneficial, HMRC may arrive at a settlement for tax, below that which might be strictly due. The cost-benefit analysis is further engaged by the fact that, on their table, HMRC have a backlog of cases to get through. In other words, HMRC must look at the entire catalogue of disputed cases, given that the resources must be stretched across all, and will be entitled therein to settle for less than the true amount in any individual case, provided this is done so as to obtain what in their view is the highest net practicable return. Further depletion of resources or further increase in complexity will necessitate prudent decisions on HMRC’s part which will be strictly at odds with what the particular legislative provisions will require.

What HMRC have done in practice however, with the revised ‘Litigation and Settlement Strategy’ (‘LSS’), is further constrained this authority. The binary framework of the LSS, which facially proceeds on an all or nothing basis, delimits HMRC’s discretion and overlooks the relativeness of the tax due. As this was a managerial decision to put the LSS system in place, it would be interesting to see empirically whether or not it in fact raises a greater amount of tax than would occur in its absence.

B) Test Cases

As regards test cases, the managerial discretion ensures that much deference is given to HMRC as to what cases they choose or do not choose to pursue. Put another way, the decision to take test cases rests solely with HMRC. To this end, accusations that HMRC have ‘picked’ on certain taxpayers have fallen on deaf ears.

As with the jurisdiction in relation to settlements, HMRC is entitled when deciding which cases to pursue to take account of the legal advice as to the chance of success, which in turn is balanced against any likely return. The more unclear the law is, the greater the return must be from a successful outing in order to justify taking a test case forward. Further, test cases do not arise in a vacuum and HMRC must decide which ones to contest, given the lack of resources to take every case. Where they do not pursue taxpayers for amounts which might in fact be due under the law, liabilities to the law remain but are unenforced. This is a far cry from the normative world in which all tax liability is collected.

C) Collection

It is perhaps in the everyday collection of tax where managerial discretion is most engaged. HMRC must make decisions as to the allocation of scarce resources. To this end, the use of risk assessment is legitimated. Through this process, HMRC analyses various sources of information in order to obtain a view as to the risk of non-compliance. Less time and fewer resources are dedicated to low-risk taxpayers whilst more time and a greater amount of resources are expended on high-risk taxpayers. This categorisation diverges from the law in that it does not indicate whether any taxpayer has actually conflicted with the law but rather focuses on the statistical likelihood of non-compliance.

HMRC is also justified in putting systems in place to ensure future compliance with the law, which might result in less tax than due being collected. A notable example of this is the Fleet Street Casuals case, wherein the Revenue legally refrained from collecting all tax that was historically due (which was estimated to be in the range of £1mil per annum over a number of years) in return for the assurance of future compliance. What prevented the Revenue from opening investigations into the historical evasion was the combination of the unknown return to be obtained from expending resources and the threat of industrial action. The latter in particular would have compromised the possibility of future compliance. This case serves to highlight that HMRC are entitled to compromise on what the law might require so long as mechanisms are put in place to ensure future compliance. Bespoke sector specific agreements, such as Flat Rate Expense Allowances relating to Airline pilots, are justified on this basis.

Ultimately, HMRC is entitled to make decisions, which are pragmatic in their opinion, as to how to go about the everyday collection of taxes. The fact that many resources would be expended in seeking to ascertain and collect the full amount of tax due under the law in fact justifies compromising on the law:

“There will often have been… some “horse-trading” that has led, for good and practical reasons, to some departure from the strict requirements of the taxing statutes” (R (Bamber) v HMRC [2005] EWHC 3221, para. 48 (Lindsay J))

4. Conclusion

Whilst morality will continue to cause debate as to its proper relevance in relation to tax, the relative nature of tax itself provides an interesting problem which is often overlooked. We often ignore the factors that in practice are more likely to influence how HMRC operate. Settlements, everyday collection strategies and the (non) pursuit of test cases are but some of the pertinent ramifications of this relativeness. With the continuing reduction in resources and the increasing layering of complexity in tax law, this issue is set only to become more important. Should we not then be as, if not more, concerned with reality than morality?

If you work in tax you’ll know the routine. Chancellor stands up. Talks. And talks. But you just want him to sit down. You want him to sit down so that someone, somewhere will press the ‘publish’ button on the huge blog that is the gov.uk website. You can then join the rest of the profession in the first difficult task of the day: trying to figure out where HM Treasury have hidden the Budget documents this year. Once found, you print them out – and sit back briefly and imagine another world, a better world, in which a thoughtful colleague is just now hurrying towards you with a cooling towel for your forehead.

What you won’t have realised is that what is true for you is also true for the Opposition. They’ll engage a temp, hired for fast running, to rush the collection of Budget documents from the MP’s office nearest the House of Commons Chamber into the hands of the Leader of the Opposition. There’ll be a special phone available on which, hapless individual, he or she can be briefed (by text message) on what the measures really mean so as to have something, anything, intelligent to say by way of reply to the Chancellor. It surely is the toughest gig in politics.

And that’s kind of how life in Opposition is generally. When you’re in Government you have an army of civil servants to help. There is no clause in the tax code so obscure that a civil servant cannot be found who has spent her entire professional life pondering its meaning. She may even have worked up a theory! In Opposition, it’s just you. She’s not going to rush to your aid. Indeed, you’re an especially fortunate Opposition if you can afford to employ even one person to help you work up tax policy ideas – or scrutinise those of the Government du jour.

You get by, as a Shadow Exchequer Secretary, with a little help from your friends. And anyone else who happens to be passing through Parliament Square. Professional Institutes, Think Tanks, Business lobby groups, professional service firms. Even the odd blogger. They all have axes to grind – and you know this. But you trust yourself – you have no alternative – to separate the good from the bad. And when you’re trying to work up policy you need even more. You need continuity, deep expertise, water carriers who can do the unglamorous business of drafting. And you need it right across the tax code.

And one of the places you get this from is the Big Four. They can afford to second staff to you for a decent period of time. You can have confidence that – supported as they are by the enormous resources of the firm – they will be technically adept and well informed. You know that they want influence – but then that’s true of everyone. And you’re just in Opposition so you’re reassured that if you get into Government you’ll be able to get civil servants to give your policy ideas the once over.

All of this is true of this Opposition. As it was true of the last.

I say this because of a distinctly adolescent piece yesterday on the Guardian’s website. It posed as straight reportage of the size of the cash value – now there’s a tendentious assertion – of the contribution made by professional services firms. It was, in reality, a complaint about the purported ‘capture’ of national interests by business (the Dark Side being played, today, by PWC and KPMG). The fire was concentrated on Labour – despite the fact that exactly the same points could and should have been made about Oppositions generally. And as for actual evidence of ‘capture’? Nada – not even assertion.

Would I prefer a world in which the Opposition was better funded to perform the critically important task of scrutinising Government policy? I would. Indeed, I argued for it in Sir Hayden Phillips’ review . Did the Guardian call for that? It did not.

And can we all agree that scrutiny is important? We can. Who reading this blog trusts the Government du jour consistently to look after the broad public interest rather than the narrow political one? And is over 11?

‘Cui bono?’ I was asked on twitter last evening. ‘Who benefits from all of this?’

You do.

Postscript: David Gauke, the present Financial Secretary to the Treasury has, as is his wont, commented on this blog:

@JolyonMaugham A good description of my life 2007-2010 (speaking as the then 'hapless individual' with the 'special phone').